Know Your Super: A Critical Guide To The EOFY

 

National Employment Standards Update

From 1 January 2024, the NES included a right to superannuation contributions. This means that most employees covered by the NES can take court action under the Fair Work Act to recover unpaid or underpaid superannuation

 

Changes To Caps (Concessional & Non-Concessional)

From 1 July 2024, the concessional contributions cap will increase from $27,500 to $30,000, allowing you to add more to your super account (if viable for your situation). The non-concessional contributions cap will increase from $110,000 per year to $120,000. This change will also affect the bring-forward rule, which will increase to $360,000 depending on your super balance.

 

Carrying Forward & Bringing Forward Contributions Rules

The carry forward rule only applies to before-tax contributions and relates to rolling over portions of unused limits from previous years into this financial year. For example, the 2018-2019 limit was $25,000. If you
contributed $5,000, there is still $20,000 that can be carried forward into another year.under the Fair Work Act to recover unpaid or underpaid superannuation.

You’re eligible to do this if you:

• Have a total super balance of less than $500,000 on 30 June of the previous financial year.
• Have unused concessional contributions cap amounts from up to 5 previous years (but not before 2018–19).

Unused cap amounts are available for five years and expire after this. For example, a 2018–19 unused cap amount that is not used by the end of 2023–24 will expire. On the other hand, the bring forward rule applies to after-tax contributions and brings your future limits forward so that you can use them earlier. This allows you to bring forward the equivalent of 1 or 2 years of your annual cap from future years. This means you can contribute up to 2 or 3 times the annual cap amount in the first year of the bring-forward period. Any amount of the bring-forward cap that’s unused in the first year can be used in the remaining 1 or 2 years. How much you can bring forward and from when will depend on your super balance, and some limitations will be imposed on you after activating this. For more information and before acting, speak with a licensed professional.

Transfer Balance Caps

The transfer balance cap applies from 1 July 2017. It is a limit on the total amount of superannuation that can be transferred into  the retirement phase. All your super account balances (regardless of how many you have) will be included to calculate this amount, You can make transfers into the retirement phase as long as you remain below the transfer balance cap. For the 2023-24 financial year and the 2024-25 financial year, this is $1,900,000.

Small Business Super Clearing House Deadlines

To qualify for a tax deduction for the 2023-24 financial year, Super Guarantee contributions must be paid by 30th June 2023. Some clearing houses can take over a week to submit the payment to the super fund, but the fund must receive the contribution before the deadline. To keep on top, the best practice may be to pay before 20th June (to allow extra time for the clearing houses to process the payment). Payments may take up to 7 business days to be transferred through the ATO and super fund before they reach the employee’s super fund account. Leave enough time for your SG payments to reach the super fund and allow for their
processing timeframes.

Depositing Contributions For Your SMSF

Any contributions that have been recorded for your SMSF need to be deposited into the fund’s bank account by no later than 30 June. This is especially important when members have reported concessional
or non-concessional contributions on their tax returns. But remember that you can’t claim the tax deduction until you have lodged your notice of intent to claim a tax deduction and have received an acknowledgement
back from the fund. No early lodgments if you have made a contribution to super.

Got questions about your SMSF or your super? Ask one of our members at Lee & Lee Accountants today. We’re always pleased to discuss these matters with you and provide any guidance you need.